House committee OKs overhaul of Corbett liquor bill

About 50 people attended a hearing by the Pennsylvania state House Democratic Policy Committee, held at the Millcreek Township Municipal Building near Erie, Pa. on Wednesday, March 6, 2013. The hearing focused on Gov. Tom Corbett’s plan to privatize liquor sales in Pennsylvania. (AP Photo/Erie Times-News, Christopher Millette)

HARRISBURG — A legislative panel on Monday endorsed a revamped version of Gov. Tom Corbett’s liquor privatization bill that would give existing beer distributors first crack at liquor and wine licenses and expand the sale of wine in grocery stores.

In a 14-10 party-line vote, the House Liquor Committee backed a bill that would potentially phase out the existing state-controlled stores as the number of private operators grows.

Both the GOP governor and Rep. John Taylor, the Philadelphia Republican who chairs the committee, called approval of the amendment a “first step” that would lead to scrutiny of the complicated legislation not only on the House floor but in the Senate.

“We have a long way yet to go, but their vote today starts us down the path to do something truly historic” for Pennsylvanians, said Corbett, whose efforts to privatize certain government functions also includes the management of the Pennsylvania Lottery.

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Minority Democrats pushed unsuccessfully for additional public hearings before any committee vote.

“I just think there are way too many questions on this particular bill,” said Rep. Paul Costa, D-Allegheny, the panel’s ranking Democrat.

Under the bill, the state’s 1,200 beer distributors would be given one year to decide whether they wanted to buy a license to sell wine, a liquor license or both. Fees for wine licenses would range up to $37,500 and to as much as $60,000 for liquor licenses, but the distributors could opt to pay off that expense over four years for an additional 5 percent.

After that, the remaining licenses — plus as many 600 additional ones at the discretion of the Pennsylvania Liquor Control Board — would be offered to other buyers on a first-come-first-served basis and at much higher fees.

The 600 state stores would be gradually reduced as the number of licensees in each county grows. For the thousands of state employees who would lose their jobs, the bill provides preferential treatment for other state hiring, grants for additional education and a two-year tax credit for private employers that hire those workers.

All the state stores in any county would be closed once the total number of alcoholic-beverage licenses — liquor, wine and the proposed new wine license for grocery stores — reaches twice the number of state stores. If the number of state stores falls below 100 statewide, they all would be closed.

If grocery stores obtain a restaurant license, requiring them to have a separate eating facility, they also could sell beer in addition to wine.

Package reform would be accomplished through a permitting process.

For a $1,000 annual fee, distributors that now sell beer only by the case or keg could sell 64-ounce “growlers,” six-packs and 12 packs. A $500-a-year permit would allow restaurants and hotels to sell up to 24 bottles at a time so long as they are not in packages larger than a 12-pack.

Mark Tanczos, president of the Pennsylvania Malt Beverage Distributors Association, which represents many of the state’s beer distributors, said he’s still learning about the latest proposal but that large retail chains would have an advantage.

“What this has turned into is just a lighter version” of Corbett’s original bill, which the association opposed, he said.

Corbett spokesman Kevin Harley said license fees under the latest version of the bill would generate most of the $1 billion that Corbett had earmarked in his bill for special grant program for public schools over four years.

The governor’s original plan, sponsored by House Majority Leader Mike Turzai, called for closing the state stores and auctioning off the 1,200 wine and liquor licenses to businesses that included big-box retail stores, grocery stores, beer distributors, convenience stores and pharmacies.”

“The governor always said that his bill was a starting point,” Harley said.